Allstate Insurance v. Klein
92 Fulton County D. Rep. 3094, 422 S.E.2d 863, 262 Ga. 599 (1992)
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Rule of Law:
A foreign corporation that is authorized to do business in Georgia is considered a resident for the purposes of personal jurisdiction and may be sued in the state's courts on any claim, regardless of whether the cause of action arises from its activities within the state.
Facts:
- Michael Klein, a non-resident of Georgia, was insured by Allstate Insurance Company under a policy issued in New Jersey.
- On August 22, 1986, Klein was a passenger in a car insured by Allstate when it was involved in a collision in Glynn County, Georgia, causing him injury.
- Allstate is a foreign corporation, but it is authorized to transact business in Georgia.
- At the time of the lawsuit, Allstate maintained an office and a registered agent for service of process in Glynn County, Georgia.
- A dispute arose when Klein alleged that Allstate refused to pay him insurance benefits due under the policy for the injuries he sustained in the Georgia accident.
Procedural Posture:
- Michael Klein sued Allstate Insurance Company in the trial court in Glynn County, Georgia.
- Allstate filed a motion to dismiss for lack of personal jurisdiction.
- The trial court granted Allstate's motion to dismiss.
- Klein, as appellant, appealed the dismissal to the Georgia Court of Appeals.
- The Court of Appeals, with Allstate as appellee, reversed the trial court's decision, finding that jurisdiction was proper.
- The Supreme Court of Georgia granted certiorari to review the Court of Appeals' decision regarding personal jurisdiction.
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Issue:
Is a foreign corporation authorized to transact business in Georgia subject to personal jurisdiction in the state's courts for a cause of action that did not arise from its activities within Georgia?
Opinions:
Majority - Sears-Collins, Justice
Yes. A foreign corporation authorized to do business in Georgia is subject to personal jurisdiction for claims that did not arise within the state. The Georgia Long Arm Statute, which requires a cause of action to 'arise out of' a defendant's in-state activities, applies only to defendants who are 'nonresidents.' The statute explicitly defines a 'nonresident' corporation as one which is not organized under Georgia law 'and is not' authorized to do business in the state. By negative implication, a corporation like Allstate, which is authorized to do business in Georgia, is considered a 'resident' for jurisdictional purposes. As a resident, it is subject to suit to the same extent as a domestic corporation, and the limiting provisions of the Long Arm Statute do not apply.
Analysis:
This decision establishes a bright-line rule for general personal jurisdiction over foreign corporations in Georgia. By defining any corporation authorized to do business in the state as a 'resident' for jurisdictional purposes, the court effectively equates registration to do business with consent to suit on any matter. This interpretation allows plaintiffs to bypass the complex, fact-specific 'minimum contacts' analysis typically required under long-arm statutes for claims unrelated to the defendant's forum activities. The ruling solidifies the principle that by seeking the benefits and protections of a state's laws through authorization, a corporation subjects itself to the full jurisdictional power of that state's courts.
